Winning Isn't Easy: Long Term Disability ERISA Claims

What Every Physician Needs To Know About Buying Long-Term Disability Insurance Policies At Any Stage Of Their Career

June 28, 2022 Nancy L. Cavey Season 2 Episode 49
Winning Isn't Easy: Long Term Disability ERISA Claims
What Every Physician Needs To Know About Buying Long-Term Disability Insurance Policies At Any Stage Of Their Career
Show Notes Transcript

Learn "What Every Physician Needs To Know About Buying Long-Term Disability Insurance Policies At Any Stage Of Their Career" from Nationwide ERISA Long Term Disability Attorney Nancy L. Cavey and more helpful disability claim information.

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Nationwide ERISA Attorney Nancy L. Cavey:

Hey , I'm Nancy Cavey, national ERISA and individual disability attorney. And I wanna welcome you to winning isn't easy before we get started, I've gotta give you a legal disclaimer, this podcast isn't legal advice, but nothing is going to prevent me from giving you an easy to understand overview of the disability insurance world, the games that disability carriers play and what you need to know to get the disability benefits you deserve. So off we go, are you a physician with a disability planned policy or claim? This episode is for you. We'll be covering what physicians need to know about their disability insurance coverage. And even if you aren't a physician, I think there are things that you can learn from this episode. I'm gonna be talking about three topics. First, what every physician needs to know about long term disability insurance, and the three ways to purchase a disability insurance policy or plan two , what every physician needs to do in terms of making time to look at their disability insurance policy before it's too late and three, the seven most important terms in every disability insurance policy or plan that a physician must know. Let's take a break before we get started.

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Nationwide ERISA Attorney Nancy L. Cavey:

We'll go back to winning. Isn't easy, ready to get started. I'm first gonna talk about what every physician needs to know about long-term disability insurance and the three ways to purchase a disability insurance plan or policy. After you completed your internship, residency or fellowship training, you are probably focusing on building a medical practice that helps your patients with a rheumatological disease or whatever the nature of your practice might be. However, at KV long , we know that an unexpected accident illness or disability can jeopardize your practice and your lifestyle. In fact, statistics show that you have a one in four chance of becoming disabled during the course of your practice. I know that because I represent many physicians, just like you, you should have a long-term disability insurance policy or plan to provide you with financial peace of mind, but what is long-term disability, insurance, long term disability insurance policies or plans aren't uniform each has their own set of definitions. Methods of proof, benefits, claims, and appeals process, and litigation tracks li long term disability . Insurance is gonna pay you a monthly benefit. Assuming that you meet the requirements of the policy and you're disabled as that term is defined in your policy or plan one of the key provisions. I think for physicians, in fact, any professional is the definition of occupation. You wanna make sure, for example, that you have ensured your inability to perform your specialty, such as a rheumatologist, a neurologist, a pain provider, a physical medicine provider. Now, what are the three ways that you can purchase a disability insurance policy and of all the classes you took in medical school? There were none that were offered in finances for physicians and what you needed to know about disability insurance. There might have been a presentation done by disability insurance agent, and you might have signed up, but I seriously doubt that you remember the terms of the policy, of the plan that you signed up for. And I know for certain that the disability policy or plan that you bought, then certainly doesn't meet your financial needs. Now that you're in practice, I think it's past time for a disability insurance checkup. And you probably think you don't have the time you like your patients need to stop and make the time let's start out by asking a very simple question. Would my family be financially secure and be able to maintain our lifestyle if I couldn't work anymore? And I had to live off the disability insurance benefits from the policy that I bought years ago? Well, the answer is probably no. You've probably gotten married. You've bought a house, you've got nice cars. You've had children, you take fantastic vacations. You may even have your children in private school. You can see that you may not be able to maintain that lifestyle if you became disabled and unable to work. So I think it's time for you to get more and coordinated disability coverage. But before you go out applying for long-term disability insurance, I want you to understand the three primary ways to get insurance and the pros and cons of each. Now, how you make this decision to buy your insurance can have significant financial consequences. If you become disabled and you have to apply for your disability benefits. So what are the three ways that you can get disability insurance the first way? And in my view, the preferable way is to buy an individual disability insurance policy known as an IDI policy through an independent agent. It's customized to meet your personal needs and your budget. A private disability policy is governed by your state's applicable contract law and a denial or termination of your benefits is a breach of contract claims . That's where you wanna be in state court. And you want a policy that's tailored to you, but of course that's going to be expensive. The second way to purchase a policy is to purchase a disability policy through a professional organization like the ABA or your state or local medical association, a group policy or plan offered by an organization is most likely covered by the federal law known as the employee retirement income security act or IRISA. Now ERISA is not a plaintiff friendly law and the remedies that you can pursue, if your benefits are denied or terminated are limited. Now worse. Yet many states such as the state of Florida allows insurance plans or policies to use. What's called an arbitrary and capricious standard of review, I think is a set of handcuffs on a federal judge, the appeal or denial of I'm sorry, the appeal of a denied or terminated claim is the trial of your case. Discovery is limited and your case is gonna be decided on what's called a motion for summary judgment. You'll never be in front of that. Federal judge . This insurance is much cheaper than IDI insurance, but I think there's a lot of pitfalls with this type of coverage. Now, the third option is to purchase a disability insurance policy through your employer. So you need to understand that unless your employer is a governmental agency or church based , your policy is governed by ERISA with all the pitfalls I noted earlier, your ERISA employer sponsored insurance is expensive because there's lots of limits on what's covered. And there are deductions from your benefits like the receipt of social security, disability benefits. So in other words, what one hand gives the other takes away? There's no doubt that purchasing a disability policy or plan is a wise idea. My dad became disabled when I was growing up and he had the foresight to purchase an individual disability insurance policy that provided us , uh , with not only a source of income, but helped my family maintain it lifestyle. So you need to understand that how you purchase that policy can make all the difference between financial security or financial ruin. If my dad had purchased an employer group Arisa covered policy, we wouldn't have been fortunate to maintain our lifestyle. We probably would have had to , uh , reduce our or change where we lived, the kind of house we lived. Wouldn't have gone to schools that , uh , were important to my parents. Our lifestyle would've changed dramatically. Now what's important here is that we've set the stage and you have understood , um , why , uh , you need to have disability policy and the three ways to purchase a disability policy. Let's take a break before I move on to why every physician needs to make the time to look at that disability policy that you've got before it's too late, so that you can start to make improvements in your disability insurance policies and coordinate your disability insurance policies. So let's take a break , Welcome back to winning. Isn't easy. Why every physician needs to make time to look at their disability insurance policy before it's too late. COVID 19 was a horrific reminder how the world can be turned upside down . In a matter of weeks, some of my physician friends learned a horrific lesson about their disability insurance and business interruption insurance. Not only do some of them have long term complications of COVID 19, but their ability to work to practice their occupation has been impacted. Some can only work part-time others have had to sell their practice. Others have had to stop working all together and they're finding too late that they can't make it financially. What are the lessons learned too late and why you should be taking a proactive approach in reviewing your disability insurance policy. I'm sure that you haven't looked at your disability policy or plan since you bought them. And I'm sure you have no idea what coverage you purchased. And I know that it is way time passed for past time for a policy review. The first thing you should look at is your policy, and you need to read it, cover to cover . Now I know that you went to medical school and you're pretty smart, but you're not an attorney and you're not an insurance agent. And unfortunately, I don't think you have the skills to ultimately understand the policy , but let's talk about some basics. The basics that we wanna start out with is how much is your monthly benefit? Is there a reduction for , or an offset for the receipt of social security benefits, pensions, practice buyouts, or equipment buyouts? Is there a reduction in your disability insurance benefits because you have other disability insurance policies or plan , how long do you have to be outta work? That's known as an elimination period before you can collect benefits. And can you maintain your lifestyle on what the, that total income is, and only, you know, that answer, but now that you know what your net monthly benefits are, the second question is what is the occupation you ensured ? Now? I know that sounds like a silly question. Disability policies don't ensure a job. They ensure your inability to do the material and substantial duties of your occupation. Now, there are two crucial terms here, the term disability and the term occupation, as they are defined by your policy. Remember there is no uniform definition. And I have cases with physicians where they may have three, four or five policies with all sorts of different definitions of disability and occupation. That can be a proof problem. Can it , so the first question that we need to answer in regard to , uh , this issue is what's the policy definition of disability. And the second question is what's the policy definition of occupation. Now, if you are a physician as , and this episode is , um , designed for physicians, the question is, did you ensure your specialty, your board certified area of practice, and by the way, has your specialty changed? In other words, what is the, the nature of your practice and what percentage of your practice are you doing certain duties or , uh , certain types of occupational , um, duties, as it may relate to the administration of your practice? Is there a dual occupation provision in the policy? And how is that defined? Do you have a dual occupation? And then of course, one of the other things that is crucial is going to be that part of the disability definition that tells you whether or not you have what's called a residual disability policy or a total disability policy. If you have a residual disability policy, you may be able to collect benefits while you are working, but, or having a certain amount of financial loss. If you have a total disability, you have to be totally disabled. Many of my physician, friends and clients don't wanna stop work immediately. They wanna sort of phase themselves outta practice. And that's an important consideration in , um , taking a proactive approach. If you become disabled and winding down your medical practice. Now, as I said, that's another consideration because you may wanna work part-time and you might find out that your disability policy says you have to be totally disabled before you can be partially disabled. I know that's strange, but I've seen those policies. Others say, look , if you can't do your own occupation, but you could do another occupation, we'll pay you benefits. Or some of them may say, Hey, you may not be able to do your own occupation, but as a physician, you've got skills that would be transferable to another , uh , field in medicine. You need to know that decision. So knowing the type of benefits you're eligible for can be, I think, crucial to effective financial planning and how you might be able to continue practice. Now, the fourth consideration is how long you're eligible for those benefits. Most policies will pay to retirement age, but many policies will have limits on how long they'll pay benefits for mental nervous conditions or subjective medical conditions like migraines or postconcussive syndrome or fibromyalgia. You might be disabled, but your policy may pay only two years of benefits, and then you're done. And you're really done. You wanna know the answer to these questions so that you can begin to make changes in your disability coverage. Now, not tomorrow, not , not next month or next year. Now, remember statistics show that 25% of Americans would come disabled. At some point during their working lifetime. COVID 19 has shown us how fragile life is and how our income can be destroyed in a minute, regardless of how healthy we are or how much we exercise or what we, or how smart we are. I think that it's time, much like you do with your patients is to take a proactive approach to disability, insurance planning, giving your family, giving yourself financial peace of mind and knowledge that you can maintain the lifestyle that you and your family deserve. I think is a gift beyond measure. Let's take a break.

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Nationwide ERISA Attorney Nancy L. Cavey:

Welcome back to a winning isn't easy, the seven most important terms in every disability insurance policy or plan that a physician must know now, before you apply for more long term disability insurance, you gotta understand not only what you have, but as part of that, the seven most important terms in your disability policy or plan. And these are crucial because not only do you need to understand what you've got, but you need to understand what you're looking for. So question number one is what law governs your disability insurance policy. If you purchase a disability insurance policy on your own or through an insurance agent, you might most likely are gonna have a private individual disability insurance policy. That's governed by state law. And that's great. On the other hand, if you purchased your insurance through your practice or a hospital or an association, your disability policy or plan is most likely governed by a federal statute known as the employee retirement income security act or ERISA. That's not a good thing. And by the way, you do know about ERISA because your group health claims that your , your office is filing are most likely governed by the ERISA statute. And you know how hard it can be to get paid. Don't you. Now, if you work for a church based employer, like St Joseph's hospital, where a state governmental body like Pinellas county or the Pinellas county Sheriff's department, or the state of Florida, your policy or plan is governed by state law, knowing which law governs your policy or plan is key. Number two, if the policy or plan is governed by Rissa, is there a get outta jail free card provision that makes it hard to overcome a wrongful claim, denial or termination, many Arisa govern disability, insurance policies or plans be they through your employer like St Joseph's hospital or through the Florida medical association will have what's called a discretionary clause. The grant of discretion is a get outta jail free card . It makes it difficult for a federal judge to reverse a wrongful claim, denial or termination. And it doesn't matter how disabled you are. The discretionary clause is gonna be a hammer on your disability claim. It's also known as the arbitrary and capricious standard of review. And what it requires you to do is to prove that the decision was wrong to prove that the decision was unreasonable. And to prove that the decision was tainted generally by, by bias or conflict. And you gotta generally prove all three of those things to be successful. Now, what you think might be unreasonable is not unreasonable in the a risk insurance world. So for an example, just because your doctor says you're disabled, doesn't prevent the disability carrier from hiring a physician who is paid to cherry, pick your medical records, or to disagree with your physicians or to a pine that you can work in your capacity as a physician. I know that sounds crazy, but that's the game. And you need to understand the game and whether you've got a discretionary clause in your policy. Now, you won't find that by the way, in a state law claim arising out of an individual disability insurance policy, there aren't discretionary clauses in individual disability policies, which in part is why they're more expensive. Number three, what's the definition of disability, disability policies or plans will generally pay benefits. If you're unable to perform the material and substantial duties of your occupation. And in some instances that will only be for two years. And the issue in that period of time is gonna be what's your occupation at the time you became disabled, what are the material and substantial duties of your occupation? And you have the burden of proving that you can't do those duties. Now, the fourth important term is the definition of occupation. Now there are multiple definitions of occupation, so you gotta go get your policy and read it. Your occupation can be defined as the occupation that you were performing for your employer. At the time you became disabled, your occupation has performed in the local economy. Your occupation has performed in the national economy, or your occupation is described in the dictionary of occupational title or your occupation , uh , as defined by your board certifications. It's crazy, isn't it, but all these different definitions of disability, but the starting point to proving your disability is to understand the policy definition of your occupation. Now you are going to be required to produce your financial records and your billing. So the disability carrier can do a forensic analysis of your practice and what you spend your time doing. Don't whine about it, it's just it, the way it is. And that may mean that you have to pay an accountant to transform your quarterly books into monthly books. You've gotta pay the price. And that's important because if you've got a residual disability policy that pays you monthly for a loss of a percent , certain percentage of the income, part of the fight's gonna be about what's called your before monthly income. And the next fight is gonna be on a monthly basis about whether or not you lost the requisite amount of income as defined by the policy to entitle you to your benefits. Now, the fifth term are policy or plan, limitations, policies, or plans, particularly Arisa plans and policies or plans through , uh , associations can have limits on benefits for medical, nervous conditions, self-reported conditions, subjective medical conditions, and substance abuse. Benefits can be limited to just two years. If you're disabling medical condition falls under any of these policy or plan provisions. And it doesn't matter how disabled you might be. Benefits will be limited to just two years now on the flip side of that, number six, our policy or plan exclusions, it's not unusual for policies or plans to exclude coverage for self-inflicted injuries or injuries related to crime or war, but you also may have a policy or plan that limits your coverage for preexisting medical conditions. For example, there might be particularly in the case of an individual disability policy, a writer that excludes coverage for a preexisting herniated disc . And if you become disabled as a result of that preexisting herniated disc , the planner policy can legally deny you your disability benefits. So we see these preexisting condition clauses or writers in both individual disability policies and in Arisa policies, number seven are filing and appealed deadlines, deadlines matter. Commonly most Arisa disability policies require that you file an appeal of a denied or terminated claim within 180 days of the denial of termination. And if you don't timely file this appeal, you can be barred or prevented from filing a lawsuit in federal court on the basis that you haven't exhausted your administrative remedies. Now, if your claim's denied and you file an appeal, there are also time limits on , uh , the period of time in which you can file a lawsuit. And again, they can be found in the policy or plan , or they can be subject to applicable state law, making a mistake about filing and appeal deadlines , uh , can really result in disaster regardless of how disabled you might be. Now, what you need to do in my opinion is to discuss these issues with an experienced ERISA IDI disability attorney, because interpreting the terms of a disability policy or plan can be difficult. You wanna understand what you've got, but you also need to understand what you need. And you also need to understand what the policy provisions are of policies or plans that you might be looking at. Now, I know that you might think that it's wise to rely on your insurance agent, and I would agree with you to an extent, my dad was an insurance agent. The problem is that many insurance agents are not competent or qualified in my view to read multiple disability policies or plans and figure out , uh , the , uh , how they , they work together. Because when you become disabled, you're gonna apply for your disability benefits based on all of your policies. And as I've said, disability policies have different definitions of disability occupation before monthly income, whether there's residual benefits, how to calculate benefits, what's off settleable and you really need someone who can sit down and analyze each of these policies, tell you what you've got, and then tell you what it is you need, and then ultimately review whatever your agent suggests to make sure that it's right for you. Now, if you are in the unfortunate situation , uh , that you're unable to work because of your , uh , disabling condition, you should consider , uh , consulting an attorney like it myself before you stop work and apply for benefits because picking the right date to become disabled is crucial. And having medical support is crucial. Many of my doctor clients , um , make the wise decision to contact me and we'll look at the policy, we'll look at the records and we'll find that the medical records aren't supportive of the claim because the doctor hasn't made complaints, or , uh , the doctor just doesn't wanna fill out forms. It's really crucial that we understand policy terms pick the right date to become disabled based on your finances. Particularly if you have a residual disability claim, talk about doctor support forms that are going to need to be filled out your ultimate goal for your practice, whether you want to continue to practice in some capacity, whether you're ready to , uh , to stop work. All of these factors are things that you need to consider in making the decision to stop, work, or slow down and , and apply it for your benefits. You just can't pull up one day and say, I'm disabled. I'm done it doesn't work. I hope you've enjoyed this week's episode of winning. Isn't easy. 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